In this regard, he indicated that “the market already plans a route of quite a few rate hikes until the end of the year.” “It seems to me that the Fed for a credibility issue has no choice but to raise 50 basis points this time”said and opined “A rise of 50 points is almost what the market expects. It shouldn’t alter too much.”
Despite this, he clarified that, at one point, “The market gave it a probability of a rise of 75 points but, with this week’s GDP and CORE wholesale inflation data, which was a little below the estimate, that possibility almost disappeared.”
For his part, andl market analyst, Santiago Llullin dialogue with Ámbito, maintained: “The Fed needs to raise rates to be able to regulate a little the US economy that is asking for it. When there is a rate hike, many of the investments go to a risk-free rate, especially US Treasury bonds.”
As for the affected sectors, Llull believed that “It takes away the possibility of investment from growth companies, such as technology companies, which are the ones that lose the most” and that this investment flow “goes to the financial sector.”
“These technology companies also lose because most companies have loans and are in debt and the loan also becomes more expensive. Therefore, what this Fed rate hike does makes technology companies lose capacity and profitability”analyzed.
In turn, he indicated that “technology companies are putting themselves to the test in quarterly balances and they had a very bad week of balance sheets. Google, Amazon, Microsoft may continue to fall. They did not meet the goals that the market had planned for these technological actions.”
“When the Fed raises the rate, the market has a big buzz and the ones that benefit the most are the financial sectors and not so much the technological ones. We have to see what will happen to the war, how long it will last because we are already entering winter on this side of the world and we will have to see what happens to consumption, “he closed.
Source: Ambito
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